PIB 6.11 PIB 6.11 Operational Risk Capital Requirement
This section applies to an
Authorised Firmin Category1, 2, 3A or 5.
PIB 6.11.2(1) An
Authorised Firmmust, subject to (2), use the Basic Indicator Approachas prescribed in PIB App6 to calculate its Operational Risk Capital Requirement.(2) An Authorised Firmmay, with the written approval of the DFSA, use the Standardised Approachor the Alternative Standardised Approach, both as prescribed in PIB App6, to calculate its Operational Risk Capital Requirementif the DFSAis satisfied that:(a) its Governing Bodyand senior management, as appropriate, are actively involved in the oversight of its Operational Riskframework;(b) it has, in accordance with the requirements set out in this chapter, implemented and maintains an Operational Riskpolicy which provides for a sound and well-defined risk management framework to address the Authorised Firm's Operational Risk; and(c) it has dedicated sufficient resources in the use of the relevant approach in its major business lines and its control and audit functions.
Authorised Firmseeking to apply the Standardised Approachor the Alternative Standardised Approachmust develop specific policies and have documented criteria for mapping gross income for current business lines and activities into the Standardised Approachor the Alternative Standardised Approach, as prescribed in PIB App6. The criteria must be reviewed and adjusted for new or changing business activities as appropriate.
Authorised Firmhas written approval to apply the Standardised Approachor Alternative Standardised Approach, it must not revert to the Basic Indicator Approachwithout DFSAapproval.
PIB 6.11.5(1) The
DFSAmay at any time by written notice require an Authorised Firmto adopt a specified approach to calculating its Operational Risk Capital Requirementwhere the DFSAconsiders that this is:(a) appropriate given the nature, size, complexity and risk profile of the Authorised Firm'sbusiness; or(b) necessary in the prevailing economic circumstances and it is in the interests of the DIFC.(2) An Authorised Firmmust comply with a requirement made under (1).